BT Investment Management (BTIM) is continuing its activity in the SMSF space, almost 18 months since it placed a greater focus on the segment.
In January 2015, the investment manager revealed it was focusing on SMSFs via the private client and high net worth individual channels as more investors, through SMSFs, were looking for direct advice and direct investments.
The business had since undertaken various actions, BTIM chief executive Emilio Gonzalez revealed.
“We’ve added resources to build out our exposure in the private clients business and we’re recognising that a lot of them are SMSFs with large balances and are looking for advice or products that aren’t readily available in the marketplace,” Gonzalez told selfmanagedsuper.
“We’ve seen flows come through from that segment of the market and our absolute fixed income product has been added to the private client platforms.
“Also in discussion is an Australian equity strategy, but importantly we’ve just signed an SMA (separately managed account) for a global product on one of the private client platforms, which has been modelled off one of our offshore strategies we’ve run out of London with JO Hambro [Capital Management].
“So there’s been a fair bit of activity through there and I believe it’s being well supported.”
Commenting on the characteristics of SMSF investors BTIM was capturing, he said trustees were searching for unique opportunities.
“They’re looking for something different, they’re looking for something special and something they can’t do themselves,” he revealed.
“In terms of our business when we’re looking at the SMSF market, we know that most of them are savvy, have got large balances and they also want advice.
“Where they’re looking in terms of investing into a pooled vehicle, they’re looking for access to strategies that they can’t do themselves, but meet their needs, so where we’ve had approval on some of those platforms, global equities for example is a lot harder and also fixed income, that’s why there’s been a lot of demand for that.”
Another differentiator with its SMSF investors was that if trustees recognised the value in a product or strategy, they were prepared to pay a higher revenue fee to access it, he said.
“So they’re less cost-sensitive if you have the right product to deliver,” he said, adding that their investment strategy approach was not generally complicated.
“It varies, but most of them try to keep it simple due to time management.
“Where it is more complex, the complexity is in the product rather than the execution, so in some respects they outsource that by investing in a fund.
“But I find that most of the discussions I have with planners who have a large SMSF base, they don’t overcomplicate it.”
Last week BTIM announced a strong half-year result, with cash net profit after tax (NPAT) for the six months to 31 March 2016 increasing by 33 per cent to $88.6 million compared to the previous corresponding period.
Statutory NPAT increased by 26 per cent to $78.3 million.
Due to a stronger Australian dollar, funds under management as at 31 March closed at $77.2 billion, $1.2 billion lower from $78.4 billion at 30 September 2015.
BTIM said the decrease was driven by unfavourable foreign exchange movements over the six-month period, totalling $5.6 billion, mitigated by positive net inflows of $1.5 billion and $2.9 billion from market movements and investment outperformance.
